PG Industry: "The Practice of Passing on Card Fee Reduction Burden Must Be Eradicated"

The PG (Payment Gateway) industry urged financial authorities to eradicate the practice of cost shifting as the notification period for PG fees from card companies approaches.

On the 8th, the PG industry stated, "Card companies have been raising PG fees each time they reduce fees for small and medium-sized merchants," adding, "If this practice continues this year, PG companies will also be forced to pass the burden onto lower-tier merchants such as small business owners and self-employed individuals for survival, perpetuating a vicious cycle and undermining the purpose of reducing fees for small and medium-sized merchants."

The Financial Services Commission recently announced the '2025 Card Fee Reform Plan.' Starting from the 14th of next month, the preferential card fee rates for 3.05 million small and medium-sized merchants with annual sales of 3 billion KRW or less will be reduced by 0.05 to 0.1 percentage points. The PG industry is concerned that card companies will shift the burden of reduced card fees onto the PG industry.

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In the payment settlement market, PG companies handle payment gateway services to facilitate smooth transactions between card companies and customers for online and small-scale merchants. While connecting card companies and merchants and performing roles such as authorization, acquisition, and settlement, PG companies are in a very weak negotiating position as the business structure treats card company fees as 'cost of sales.' The PG industry claims that every time card companies notify PG companies of fee increases after recalculating eligible costs, it directly impacts their financial structure.

The PG industry said, "The practice of card companies shifting the cost of reducing fees for small and medium-sized merchants onto PG companies has reached an intolerable level," and added, "The behavior of card companies passing costs they should bear themselves onto relatively weaker PG companies must be fundamentally blocked."

PG companies expressed concern that the fee shifting phenomenon from 'card companies → PG companies → PG sub-merchants' is reflected in product and service prices, ultimately leading to increased consumer burdens. The PG industry called on the government and the National Assembly to step in to prohibit unfair fee increases and establish regulations to prevent card companies from shifting losses caused by reduced card fees for small and medium-sized merchants onto PG companies and general merchants, who have relatively weak bargaining power.

A PG Association official explained, "There is an urgent need for a system that can prohibit and sanction unfair fee increases against PG companies," and added, "Financial authorities must establish a structure where card companies, PG companies, and PG sub-merchants can coexist to break the vicious cycle of cost burdens." A PG company official said, "PG companies already suffered huge losses last year due to the unsettled payments issue with TMON and WEMAKEPRICE, and the impact will inevitably increase if card fees rise," adding, "Card companies, as participants in the e-commerce market, must move away from their annual pursuit of maximizing their own profits and take the lead in creating a fair and sustainable commercial order and payment ecosystem."

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